Section 2: Local Government Projects Overview
Anchor: #i1006309Local Government Use of the LGPP Manual
As described in Chapter 1 – Introduction, the term local government (LG) includes municipalities, counties, county and regional toll authorities, metropolitan planning organizations (MPO), regional mobility authorities (RMA) and some private entities. A LG should adopt and use the contracting procedures found in the Local Government Project Management Guide (LGPM Guide) to comply with the state and federal laws, rules and policies for transportation projects as presented in this Manual. This Manual provides the regulations and policies related to LG project initiation, preliminary design, bid document preparation, letting and award, contract execution, contract administration and other aspects of a construction or non-construction transportation project.
Anchor: #i1006331Federal Funding Requirements for LG Projects
This Manual and the LGPM Guide apply to projects involving both state (TxDOT) and Federal Highway Administration (FHWA) funds. They do not apply to projects involving public transportation, aviation or other projects funded through the Federal Transit Administration, Federal Aviation Administration or Federal Railroad Administration. Federal regulations apply to all federally funded projects and are referenced throughout this Manual. Title 23 CFR (Highways) is the primary regulatory reference; however, other titles have applicability, such as Title 2 CFR (Uniform Administrative Requirements and Cost Principles), Title 49 CFR (Transportation) and Title 29 CFR (Labor). Federal Highway Administration (FHWA) regulations can be found on its website. All federal regulations can be searched on either the U.S. Government Publishing Office e-CFR website or the Government Publishing Office Federal Digital System website.
FHWA funds managed by TxDOT on LG projects are part of the Federal-aid Highway Program. The Federal-aid Highway Program is primarily a reimbursement program – not a grant program where the LG receives funds prior to their expenditure. Eligible costs incurred in compliance with the regulations will be reimbursed to the LG by TxDOT. Then TxDOT will receive reimbursement from FHWA. TxDOT and FHWA have an oversight and monitoring responsibility on projects with federal funds directly administered by LGs. If any of the federal share of project costs are incurred without following the pertinent federal regulations, they are subject to being declared non-participating and will not be reimbursed. This includes Pass-Through Finance projects (also called Pass-Through Toll projects). Pass-Through Financing is one method of the LG incurring costs for development of a transportation project and then obtaining reimbursement from TxDOT over an extended time period after construction is complete. TxDOT may seek reimbursement from FHWA after reimbursing the LG. All state and federal regulations outlined in this Manual apply to Pass-Through Finance project agreements for either design-bid-build projects or design-build projects.
In accordance with Title 49 CFR Part 26, TxDOT’s Disadvantaged Business Enterprise (DBE) program includes the adoption of TxDOT’s DBE plan and is monitored by TxDOT’s Civil Rights Division. The importance of Title 49 CFR and adoption TxDOT’s DBE program in the implementation of LG projects cannot be over-stated. It is an important commitment made by every LG and any LG contractors and consultants participating in the LG program. As stated in 49 CFR §26.13(b) every contract that TxDOT (and by adoption of TxDOT’s DBE program, the LG) executes with a sub-recipient (including contractors and consultants) must include the standardized assurance statement which states: 1) these parties will not discriminate based on race, color, national origin, or sex in the performance of any FHWA-assisted contract; 2) the contractor shall carry out the requirements of 49 CFR 26 in the award and administration of FHWA-assisted contracts; and 3) failure by the contractor to carry out these requirements is a material breach of contract, which may result in contract termination or other remedy as deemed appropriate by the recipient. TxDOT’s Civil Rights Division is established to provide assistance, resources and monitor activities for DBE. LG’s can refer to the DBE Program Compliance and Monitoring Guide for further information regarding important goals and requirements.
The LG is responsible for ensuring all project requirements are met so federal funding is not jeopardized. This provision is covered in the TxDOT/LG Advanced Funding Agreement for the project, which is described later in this chapter.
Anchor: #i1006392General Contracting Requirements for LG Projects
In order for federal or state funds to be spent on a transportation project in partnership with a LG, a written contract must first be executed between TxDOT and the LG. An Advance Funding Agreement (AFA) is the form of contract most frequently used for development of jointly funded projects with TxDOT and LGs. The AFA specifies whether the LG or TxDOT is performing each stage of the work for the project or program. For all activities performed by the LG, TxDOT maintains an oversight responsibility. TxDOT’s district offices are the primary points of contact for the LGs throughout the project development process, although the TxDOT Transportation Planning and Programming Division (TPP) will provide oversight for non-construction projects with an MPO acting as the LG. Details of the AFA procedures are contained in Section 4 of this chapter of this Manual.
Many contracting requirements depend largely upon the funding source for the LG project. Projects may include federal, state, LG or even private funds. Federal funds impose specific requirements. State funds may impose different requirements. Both federal and state requirements will apply if a contract involves federal funding. State requirements will prevail if the contract involves only state and local funding. If a project involves any federal or state monies, applicable federal or state requirements take precedence over local contracting requirements. Typically, the most restrictive requirement prevails in order to ensure compliance with all.
The Manual provides guidance on a wide variety of project delivery methods available to TxDOT and LGs. This document provides information related to TxDOT district and division responsibilities associated with the administration and oversight of highway improvement contracts and related transportation projects let or administered by the LG as well as non-construction projects and/or programs. Available project construction delivery methods include those allowed by law, which may include design-bid-build, design-build and construction manager/general contractor. Nearly all LG projects are design-bid-build.
Anchor: #i1006428LG Project Oversight
TxDOT’s goal is to allow a LG flexibility to effectively administer a project while minimizing the use of TxDOT resources. However, TxDOT has a stewardship responsibility for all LG projects involving federal or state funds or impacting the state highway system (SHS). The degree to which TxDOT monitors these projects depends primarily on a combination of funding source, highway system, statutory requirements, demonstrated competence of the LG personnel and resources, and the potential risk posed by non-compliance. TxDOT monitoring of construction projects on the SHS with state or federal funds will focus on proper geometric design, application of TxDOT material and construction quality standards, and compliance with statutory requirements. In summary, TxDOT will tailor the level of monitoring to the relative potential risk to TxDOT, the complexity of the relevant project and the capabilities of the LG Staff.
As stated in federal and state laws, prior to authorizing the LG to perform any element of the project development process, TxDOT has a responsibility to determine if each LG is qualified and has adequate resources and controls to perform the project work. This determination is made through the completion of the LG Agency Risk Assessment (RA), which assigns an overall risk score (ORS) for the LG. LGP maintains a centralized database for LG Risk Assessment program data, supports the districts and divisions, and monitors requirements for periodic updates of RAs based on the established ORS. The district or division determines the appropriate communication with the LG regarding the ORS. Additional oversight is established when a new LG project is identified, and the “Oversight Level Special Approval, Part A and Part B” form is completed, as discussed below.
The requirement for TxDOT approval is referenced in many areas throughout this Manual. If no specific office is referenced, the appropriate TxDOT district office should be contacted for coordination of TxDOT approval.